Ukraine may exit Egypt wheat market over new rules

Ukraine exported around 2.5 million tonnes of wheat to Egypt in the 2016/17 season, or about 14 percent of the country's total wheat exports of 17.5 million tonnes, according to consultancy UkrAgroConsult.

"I do not exclude that this (marketing) year we will have problems with exports to Egypt and they will take our wheat in smaller volumes," Maksym Martyniuk told Reuters.

"We could generally tumble out of the Egyptian market because we have no such volumes and specifications that we could supply to Egypt," he said in an interview in Kiev.

This spring, Egypt, the world's largest wheat buyer, imposed new requirements for imported wheat, raising the protein content to 12.5 percent from 11.5 percent for wheat bought from Ukraine and Russia.

Martyniuk said the move could help Russian suppliers.

"There is an opinion that this is being done to increase the supply of Russian grain. And if the buyer intends to buy Russian grain, then we are unlikely to be able to change anything," he added.

Black Sea grain growers Ukraine and Russia are rivals on the global market.

Martyniuk said Ukraine would have to boost its exports to Asian markets to compensate for any possible fall in trade with Egypt.

"We need to increase supplies to the Asian market, which consumes large amounts of both milling and feed grain ... Asian countries can bake from grain with a lower protein content," he said.

In the 2016/17 July-June season Ukraine exported around 6.6 million tonnes of wheat to Thailand, Indonesia, Philippines, Bangladesh and Korea. Those markets account for around 38 percent of its wheat exports.

HIGH HARVEST, BUMPER EXPORTS

Martyniuk said Ukraine was likely to harvest 61-63 million tonnes of grain this year, including 26.6 million tonnes of wheat, 8.6 million tonnes of barley and about 26 million tonnes of maize.

Last year Ukraine harvested a record 66 million tonnes of grain, including 26 million tonnes of wheat and 28 million tonnes of maize.

Giving the figures for the first time, he said grain exports could total 44 to 45 million tonnes this 2017/2018 season, exceeding the previous season's record of 43.9 million tonnes.

Martyniuk added that the volume could include 17 million tonnes of wheat.